Sears Slumps on Insider Sale, Las Vegas Sands Wins Big on Upgrade

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrial Average slumped for a third time in as many days, continuing December's troubling bearish market tendencies. With Wall Street anxiously looking to Friday's November job numbers, the Dow fell 24 points, bringing its three-day streak of losses to nearly 200 points. Today's 24-point stumble amounted to just a 0.2% haircut, however, sending the index to15,889.

Wal-Mart was the Dow's biggest decliner, falling 1.2%. The stock started trading ex-dividend today, which put downward pressure on shares. Starting today, anyone who owned Wal-Mart shares as of market close on Tuesday can sell their shares and still get the stock's next quarterly dividend of $0.47. Inevitably, short-term traders take advantage of this, ridding themselves of the inherent risk in owning a stock while locking in a small income stream in the future. For long-term investors, ex-dividend pullbacks are nothing but noise; it's far better to evaluate the long-term competitive environment. And Wal-Mart certainly has some intimidating rivals, most notably, which dominates online retail and may start delivering packages by drone in the future.

Sears Holdings fell far more than Wal-Mart, losing 8.3% as investors lamented the fact that the biggest Sears shareholder sold a big chunk of its stake. Eddie Lampert's hedge fund trimmed its controlling 55.4% ownership in the department store to 48.4%. Lampert's position is obviously still substantial, and shows a profound and perhaps misguided confidence in the beleaguered company. Last quarter's finances speak to Sears' recent struggles: The company's losses were far greater than expected, and sales continued to fall markedly. 

Finally, shares of Las Vegas Sands added 3.9% on news that credit rating agency S&P upgraded the quality of the casino's debt. Credit agencies like S&P rate bonds based on how likely a company is to default. When ratings are poor, a default is seen as more likely, and the unfortunate corporation in question is essentially forced into rewarding its bondholders with higher interest rates for the increased risk they assume. Las Vegas Sands shareholders can sleep easier now with the knowledge that the casino can borrow money at lower rates moving forward.

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